Covered losses under a homeowner's policy can be paid on either an actual cash value basis or on a replacement cost basis. When actual cash value is used, the policy owner is entitled to the depreciated value of the damaged property. Under the replacement cost coverage, the policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.
- Category: Homeowners Insurance FAQs
- Written by Shelly Pulse
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